Economic strength, fiscal control, and improving inflation expectations
Economic strength, fiscal control, and improving inflation expectations.
“In the past six months, a chorus of analysts and commentators have warned of an impending collapse of the US economy. Many predicted that persistent inflation, high interest rates, and ballooning government deficits would drag growth to a halt and trigger a recession. However, data tell a different story: the United States has demonstrated economic strength, fiscal control, and improving inflation expectations.
At the start of 2025, forecasts painted a gloomy picture. The first quarter saw a contraction in GDP, with the economy shrinking by 0.5 percent. However, this decline resulted from lower government spending and higher imports, while the private sector continued to strengthen. Soon afterward, the narrative shifted. By mid-year, leading economic models and analysts began revising their growth estimates upward. Trading Economics, for example, projected a robust 3.5 percent GDP growth rate for the second quarter, a sharp reversal from earlier pessimism. The Atlanta Fed’s GDP Now model reflected a similar positive change, estimating 2.6 percent growth for the second quarter as of July 9. Additionally, consensus estimates rose to 2.1 percent for the second quarter, up from 1.3 percent previously, while inflation estimates declined.
This turnaround has been fueled by several factors:
US households continued to spend, especially as wage growth outpaced inflation.
Fixed investment rose by 7.6 percent in early 2025, the strongest pace since mid-2023.
Businesses front-loaded imports ahead of new tariffs, boosting economic activity, and subsequent revisions show positive exports and normalized imports.These widespread upward revisions have caught many commentators by surprise and forced a reevaluation of earlier bearish calls…
The events of 2025 remind us of the risks of Keynesian economic forecasting and the fallacy of ”all else remaining equal.” While challenges remain, especially regarding long-term debt and interest costs, the US economy has once again proven more dynamic and adaptable than many experts anticipated, and the administration’s focus on fiscal responsibility is clear.
Rising growth estimates, falling inflation expectations, budget control and disciplined spending cuts highlight that earlier fearmongering estimates were ideologically motivated.
The lesson from this experience is to approach economic forecasts with caution. Keynesian estimates often prove overly optimistic regarding growth and inflation when government spending increases and predict gloom when the opposite happens.
The US economy is stronger, and the private sector is likely to grow faster as tax cuts and deregulation lift burdens on investment and employment.”
From an opinion piece in Epoch Times by:
Daniel Lacalle, PhD, chief economist at hedge fund Tressis, and author of the bestselling books; “Freedom or Equality,” “Escape from the Central Bank Trap,” “The Energy World is Flat,” and “Life in the Financial Markets.”
Real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter of 2025, according to the advance estimate (the first of three) released by the US Bureau of Economic Analysis (BEA). In the first quarter of 2025, real GDP decreased 0.5 percent. The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction from the calculation, and an increase in consumer spending. These movements were partially offset by decreases in investment and exports.
The Conference Board Consumer Confidence Index improved by 2.0 points in July, to 97.2, from 95.2 in June.
Consumer confidence has stabilized since May, rebounding from April’s plunge (due to inflated tariff paranoia, thank you main-stream media and “democrat” politicians. RB), but remains below last year’s heady levels,” said Stephanie Guichard, Senior Economist, Global Indicators at the Conference Board.
US raw steel production up from previous week
In the week ending July 26, 2025, US raw steel production was 1,777,000 net tons at an ACUR of 78.4 percent, up 0.5 percent from the previous week ending July 19, 2025.
Adjusted YTD production through July 26, 2025, was 50,527,000 ne tons at an ACUR of 76.3 percent.
US drill rigs running down from previous week
There were 542 drill rigs running in the US the week ending July 25, down two rigs from the previous week, down 47 rigs from July 26, 2024.
Meanwhile, Canadian drillers added 10 rigs, to 182 during the same period. This is down 29 rigs from July 26, 2024
Texas factory activity picked up in July
The Federal Reserve Bank of Dallas released its Texas Manufacturing Outlook Survey results and reports Texas factory activity picked up notably in July, according to business executives responding to the survey. The production index, a key measure of state manufacturing conditions, jumped 20 points to 21.3, its highest reading in more than three years.
Other measures of manufacturing activity were mixed. The new orders index remained negative but moved up to -3.6 from -7.3. Meanwhile the capacity utilization and shipments indexes pushed up into positive territory, coming in at 17.3 and 2.7 respectively.
Perceptions of broader business conditions stabilized, and outlooks improved.
The Chicago Business Barometer advanced 6.7 points in July
This was the largest increase in thirteen months, bringing the index to the highest since March 2025. However, the index still has been below 50 for twenty months.
The increase was driven by a sharp rise in New Orders and Order Backlogs. Production, Employment and Supplier Deliveries saw small decreases.
On Wednesday the Federal Reserve held interest rates steady for a fifth straight meeting, but faced rare dissents from two officials seeking an immediate rate cut. The benchmark rate is stuck in a range between 4.25% and 4.50%.
News Headlines
Monday an insane man walked into an office building in Manhattan and opened fire, killing four people before he shot himself, ending the drama. What is most disturbing to me about this is, he parked his BMW illegally in the street, got out of his car with a semi-automatic weapon, clearly visible, and walked down the street in plain view to all, to his target. What is wrong with people? Someone, or several, with balls, could have jumped on him from behind and ended his plans. But no, he just went on his way.
Of course, being New York, no citizen had a gun, and I do not know if New York has an operating police department, since the liberals do not like law, police or armed citizens. All this could have been prevented, lives saved 3. You think guns are bad? This is what happens when you let them take your gun rights away. The bad guys can always get a weapon.
People are experiencing famine conditions in Gaza. Why? Hamas consumes the food and supplies delivered by food and aid agencies. Hamas needs to be destroyed completely. All dead. I do not understand why it is taking the IDF so long to accomplish this. Most or all of the hostages are dead, or have been released piecemeal in exchange for concessions. It is a sad and ridiculous situation.
MAKE AMERICA GREAT AGAIN
“KEEP AMERICA GREAT”
Have a great weekend…. God bless America!
Buy American made products whenever you can, it’s good for you, good for your friends and neighbors and good for our country.
If you are hiring…try to hire a veteran…. they are loyal, disciplined, hardworking…and they deserve our support.
By the way, if you wish to comment on my rants or offer any other insights you may have, you are encouraged to email me.
TEDDY ROOSEVELT ON IMMIGRANTS IN AMERICA…1907
In the first place, we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the person’s becoming in every facet an American and nothing but an American. There can be no divided allegiance here. Any man who says he is an American, but something else also, isn’t an American at all. We have room for but one flag, the American flag…We have room for but one language here and that is the English language…and we have room for but one sole loyalty and that is a loyalty to the American people.”
